User Account

All Pages

What should the probability of winning

Assignment Help Business Economics
Reference no: EM13915089

ABC Company does subcontracting on government contracts. ABC Company is a small company with limited capital with a utility function described as follows:

U(x) = -x/100-x^2/5,000 for x < -1,000
U(x) = x/100-170 for -1,000 ≤ x ≤ 10,000
U(x) = √x for x > 10,000

Part 1

Suppose ABC Company is considering bidding on a given contract. It will cost $2,000 to prepare the bid. If the bid is lost, the $2,000 cost is also lost. If ABC Company wins the bid, it will make $40,000 and recover the $2,000 bid preparation cost. Suppose ABC Company believes the probability of winning the contract is 0.5 if a bid is submitted. What should it do?

Part 2

What should the probability of winning have to be before ABC Company would submit a bid?

Reference no: EM13915089

Questions Cloud

Ethics and law presentation : Ethics and Law Presentation
Describe the lifo inventory method : Describe the LIFO inventory method. What effects does it have on reported income, cash flows, and income taxes during periods of price changes?
A students personal leadership plan : Name is a student currently studying to obtain her degree in Human Services Management. It is name's goal to graduate with her associate's degree then continue on with her education graduating from the University of Phoenix with a bachelor's degre..
Performance of two distinct sorting algorithms : This lab assignment requires you to compare the performance of two distinct sorting algorithms to obtain some appreciation for the parameters to be considered in selecting an appropriate sort.
What should the probability of winning : Suppose ABC Company is considering bidding on a given contract. It will cost $2,000 to prepare the bid. If the bid is lost, the $2,000 cost is also lost. If ABC Company wins the bid, it will make $40,000 and recover the $2,000 bid preparation cost..
Provide the sql code that inserts data into all of the table : Provide the SQL code that inserts data into all of the tables
Onus is on the senders of messages. : How well do you respond to honest feedback from someone who sent it? What are some ways in which senders might receive feedback from their messages? How might this feedback affect the sender and the message? Why is this important?
How would you apply confidence intervals : Summarize what the case is about, and what the variables represent. How would you apply confidence intervals? How would you apply hypothesis testing
Why the lcm rule resulted in a write-down in the first year : Explain why the LCM rule resulted in a write-down in the first year. What is the inconsistency between the first- and second- year treatments of the change in the price of oil?

Reviews

Write a Review

Business Economics Questions & Answers

  An increase in the price of the commodity

If the demand for a commodity is elastic, an increase in the price of the commodity. Assume the cross price elasticity of demand for products A and B is positive.

  Paid in dollars and the exchange rate equals

Assume an initial exchange rate where $1 = €1. An American company sells $10 million in goods to a German firm. The American company will receive less than $10 million in revenues if (assume no transactions to prevent exchange rate risk):

  Consumers buy from the firm with the lower price

Consider Bertrand competition with homogeneous products. Two firms, 1 and 2, produce an identical product and compete by choosing price. Consumers buy from the firm with the lower price. Assume that the firms can only set integer prices, so if one wa..

  Examine the economic impact of current approaches

Analyze the economic impact of current approaches to controlling air pollution to determine which approach is the most effective. Provide support for your rationale.

  Prove which at the revenue-maximizing quantity

Prove which at the revenue-maximizing quantity, cost elasticity of demand equals one.

  What was the growth rate of nominal gdp

Illustrate what was the growth rate of nominal GDP between 1996 also 1997. Why do economists use real GDP per capita to measure the economic progress.

  What is the equation of marginal costs

What is the equation of marginal costs? At what level of output are average total costs at their minimum?

  Which of the best defines the business cycle

Tariffs are more favorable to an importing country than quotas because: Which of the following best defines the business cycle? Suppose that 2000 is the base year used to calculate the CPI. And ethe CPI in the year 2007 is 110. What is the value of t..

  Insurance offers mail-order auto mobile insurance

21st century insurance offers mail-order auto mobile insurance to preferred risk drivers in the Los Angeles area.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  The economic impact of the baby

The Economic impact of the Baby Boomers on the US economy? prepare a paper and present it in the class by a powerpoint. Please use scholarly references and statistical data to support your argument

  Equilibrium level of income

Starting with the situation in part d, suppose the government starts taxing the population $30 each year without spending anything.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd